Statement of changes in equity PDF

Preview

Summary

Lecture on the preparation of statement of changes in equity...

Description

LA SALETTE OF ROXAS COLLEGE Vira, Roxas, Isabela S.Y. 2021-2022 Learning Module in Fundamentals of Accountancy, Business & Management 2 Second Semester Midterm/Weeks 3 - 4 Schedule of Lessons Topics

Week/s: 3-4

Explore Activity 1: Go Online Activity 2: K-W-L-A Chart Firm Up Activity 3: Activity 4: Activity 5: Deepen Activity 8:

Identify Me Justify Me How Well Can I Perform Reflective Essay

Schedule Day 1 Day 2 Day 3 Days 4-6 Days 7-8

Online Discussion Via MS Teams/Google Meet

Lesson 1:

Statement of Comprehensive Income

Let us start the week with full of love, faith and hope. Let us feel the presence of our Almighty God and pray the Oratio Imperata (For protection against COVID-19 Virus) or you can copy this link on YouTube. https://youtu.be/ZY6h_dUUBuI

Introductio In this module, you will learn the nature of the SCI and how to prepare it. The SCI is a financial statement that presents the success or failure of business operations of a company for a given period, in terms of profitability. Its elements are revenues and expenses. Unlike a service business, a merchandising business has to purchase merchandise that it will resell to earn revenues. Thus, the revenue account of a merchandising business is sales and it has cost of sales aside from expenses. As in the service business, the revenue concept remains the same, i.e., there is an increase in asset in the form of cash, accounts receivable, or notes receivable. On the other hand, expenses and cost show a decrease in cash on the date the expense or cost is incurred, for cash terms; or on a future date, for credit terms. As you go over the lessons, think about this question: 

Why do you think a proprietor assesses the performance of his/her

Setting Goals As you complete understanding this lesson, you are expected to acquire the following competencies: 1. identify the elements of the SCI and describe each of these items for a service business and a merchandising business; 2. prepare an SCI for a service business using the single-step approach; and 3. prepare an SCI for a merchandising business using the multistep approach. 21st Century Skills Core Values

critical - thinking, creativity, character and collaboration

EXPLORE 1 |FABM2

W

k 34

Activity 1: Go Online. (critical - thinking, creativity, character and collaboration) Directions: Read about the SCI of a single proprietor. Cited in the article on the link http://www.accountingverse.com/accounting-basics/income-statement.html are the accounts that constitute other comprehensive income such as evaluation surplus, translation adjustments, and unrealized gains. Prepare a report containing a maximum of two sentences describing each of the cited accounts. 7 Activity 2. K-W-L-A Chart Directions: Check your understanding of this lesson by doing the activity below. Fill in the first column with the things you already know and W column of the things you still want to know and wonder from this lesson. Do not answer the L and A column yet. Write your answers on the activity sheet found at the end of the lesson.

STATEMENT OF COMPREHENSIVE INCOME K

W

L

A

What I know about the topic

What I want to learn about the topic

What new and interesting information I have learned?

How can I use and apply these information?

END OF You just shared your knowledge about the statement of comprehensive income. Get to know more about this lesson through the next learning segments.

FIRM-UP Your goal in this section is to gain information on how to Identify the elements of the SCI and describe each of these items for a service business and a merchandising business.

LC#1: Identify the elements of the SCI and describe each of these items for a service business and a merchandising business Activity #3: Identify Me. Directions: Determine whether the account title is general or selling. __________1. Salaries of administrative assistant __________2. Salaries of utility staff __________3. Salaries of sales agents __________4. Light and water of home office __________5. Rental of Sales office building __________6. Depreciation of office equipment __________7. Depreciation of delivery van __________8. Advertising expenses __________9. Commission expense __________10. Sales Commission of Account Executive Process Questions: 1. How do you identify the General Expense? 2. How do you identify the Selling Expenses? You may copy and access this link for further information: https://youtu.be/lp1ZIL-LkmU Activity #4: Justify Me. Directions: Solve for the elements of Comprehensive Income for the following independent

Activity: 2 |FABM2

W

k 34

1. Joy Ride Company’s salaries to sales agents amounted to Php10,000. Salaries of accountants amounted to Php20,000. No other expenses were incurred. How much is the company’s general and administrative expense?

2. Joy Ride’s beginning inventory amounted to Php250,000. Net purchases amounted to Php70,000. Freight is 15,000. Compute for the company’s cost of goods available for sale.

3. Joy Ride’s purchases is Php100,000 while purchase returns and purchase discounts amounted to Php20,000 and Php10,000 respectively. How much is the company’s purchases?

4. Company’s Cost of Goods Sold amounted to Php235,000. Net cost of purchases totaled Php85,000. Beginning inventory amounted to Php250,000. Php500,000. Compute for the company’s Ending Inventory.

Sales

amounted

to

5. Gross profit of Happy Joy Ride amounted to Php175,000. Net Sales is Php300,000, compute for cost of goods sold? Process Questions: 1. Were you able to solve the problems correctly? How? 2. Which of the terms are you not familiar with? For further explanation about the topic, visit the following sites then determine which of your answers are correct. 1. https://drive.google.com/file/d/1aMKn8fq8FSEXEmioQQTGiB_4Me8z3ZHA/view? usp=sharin 2. https://youtu.be/lp1ZIL-LkmU

Activity #5: How well can I Perform. Prepare a multi-step Statement of Comprehensive Income for the following accounts taken from Tin’s Ready to Wear Company for the period ended of December 31, 2019 Net Sales Php75, 000.00, Cost of Sales Php30, 000.00, General and Administrative Expenses Php12,000.00 and Selling Expenses Php25, 000.00. Process Questions: 1. How did you find the activity? 2. What difficulty or problem did you encounter in accomplishing this activity? For further explanation about the statement of comprehensive Income direct yourself to this video clip  https://youtu.be/lp1ZIL-LkmU

END OF FIRMIn this section, the discussion was about the account titles under the assets, liabilities, and capital accounts of the Statement of Financial Position. You were also engaged to different activities to assess your understanding. Good job! Now, stay put! You are now close to the finish line. Expand more your understanding by answering the activities in the next learning segments! Enjoy learning 

DEEPEN You are almost there, Salettinian! Now, go back to the activity “K-W-L-A chart” posed at the start of this lesson. Complete now the L and A column. Prepare yourself on the succeeding activities!

Before doing the next activity, you have to recall the elements of the statement of comprehensive income and how to prepare it.

3 |FABM2

W

k 34...